Share Centre says Vodafone is a ‘buy’ despite profit fall

19th May 2015


As Vodafone reports its full year results, Graham Spooner, investment research analyst at The Share Centre, explains why he rates the company as a “buy” for investors…

This morning, mobile telecom giant Vodafone reported its full year results, with a fall in adjusted operating profit to £3.51bn over the last year. However, the group has shown a fourth quarter rise in organic service revenue, which should please investors after several quarters of decline.

Despite some shortcomings, the group hailed signs of stabilisation in its key European telecom markets. Chief Executive Vittorio Colao commented that these signs have been supported by improvements in the group’s commercial execution and a very strong demand for data.

We are positive about Vodafone’s plans to continue its work in emerging markets after seeing steady growth. The group has raised the dividend per share by 2%, to 11.2p, and reiterated its intention for further future dividend growth.

Vodafone results were broadly in line with expectations and the group is appearing to see signs of stabilising markets. We recommend now as a good time to ‘drip feed’ into the group, for low to medium risk investors seeking income.

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